SELLING MY RENTALS - WHERE SHOULD I GO TO REINVEST

[Gail Greenberg]

I own rentals in central Indiana and Jackson, MS. Would like to get out of Jackson - tenants are too unstable and the houses are too high-maintenance. But where to go? Would love your recommendations on solid blue collar towns where the acquisition cost of decent rentals is low-to-moderate and there are some good property managers for out-of-state owners.  I've been spoiled - instead of the 1 percent rule, I get over 2 percent on many of my properties.  Thanks so much!

[Dan Maciejewski]

I can second Pinellas County.  I have a lot of clients in the West and Midwest moving their money via 1031 in to my market.  Or simply expanding their portfolios to include Pinellas / Tampa Bay Area.

Be warned, though -- we look nothing like some other markets!  A lot of people come here and expect their strategies to work here.  If you simply look at list price to sale price or appreciation, sure -- the whole country is "hot."  We are seeing 40+ offers on homes, appraisal gap waivers in excess of 10-20% of contract price, 50%-80% cash sales depending on area and price point, homes selling for 30%+ over ask, nobody wants to see "escalation addenda," etc. . . 

For your questions -- you might want to look for areas / cities / strategies before asking for people. Most of us will tout our areas!! I have heard that the FL panhandle has goo ROI, but I'm not investing there so I don't know. Also Gulf Shores AL.

And, if your returns are looking good, you may want to just invest your proceeds instead of getting out of your current investments.  You may just need better tenants / property managers.  If you're seeing great returns despite the houses being high-maintenance, then that's not a bad trade-off.  Although, great percentages but low cash flow does get old.  Revenue fixes everything and you can't put percentages in the bank!

So, a lot of people decide that an area can be "topo desirable," and forget the returns and just refuse to compete.  Despite all that, our returns are still above average and looking better despite the rising costs of acquisition (mainly the purchase price).